Sports Uniforms Ltd has an average annual demand for blue,medium polo shirts of 20 000 units.The cost of placing an order is $70 and the cost of carrying one unit in inventory for one year is $25.
Required:
a.Use the economic-order-quantity (EOQ)model to determine the optimal order size.
b.Determine the reorder point assuming a lead time of 10 days and a work year of 250 days.
c.Determine the safety stock required to prevent stockouts assuming the maximum lead time is 20 days and the maximum daily demand is 125 units.
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Question

Quizplus · Accepted Answer

The Answer of Sports Uniforms Ltd has an average annual demand for blue,medium polo shirts of 20 000 units.The cost of placing an order is $70 and the cost of carrying one unit in inventory for one year is $25.
Required:
a.Use the economic-order-quantity (EOQ)model to determine the optimal order size.
b.Determine the reorder point assuming a lead time of 10 days and a work year of 250 days.
c.Determine the safety stock required to prevent stockouts assuming the maximum lead time is 20 days and the maximum daily demand is 125 units.
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Sports Uniforms Ltd Has an Average Annual Demand for Blue,medium